Brief Exercise 18-4 Bruno Company accumulates the following data concerning a mi

Question

Brief Exercise 18-4 Bruno Company accumulates the following data concerning a mixed cost, using miles as the activity level. Miles Total Driven Cost Miles Total Driven Cost anuary 8, $14,170 March 8,490 $14,996 February 7,505 13,518 Api 8,190 14,495 Your answer is correct. Compute the variable cost per mile using the high-low method. (Round variable cost per mile to 2 decimal places e.g.1.25.) Variable cost per mile 1.5 SHOW SOLUTIONSHOW ANSWER LINK TO TEXT INTERACTIVE TUTORIAL X Your answer is incorrect. Try again. Compute the fixed cost elements using the high-low method. Fixed costs 22552260

Explanation / Answer

Variable cost per mile=[Total cost at highest level-Total cost at lowest level)/(Highest level-Lowest level)

=(14996-13518)/(8490-7505) =$1.50 per mile(Approx)

Fixed cost=14996-(1.5*8490)

=$2256.69(Approx)(Please note that intermediate calculations have not been rounded off].

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